Indonesia’s 2024 fiscal deficit will not exceed 2.8% of GDP, chief econ minister says

JAKARTA (Reuters) – Indonesia will manage its 2024 fiscal deficit so that it does not exceed 2.8% of GDP, but it will be wider than the previous estimate of 2.29% due to rising social assistance and fertiliser subsidies, a senior minister said on Thursday.

The recent estimate is close to the country’s legally mandated annual budget deficit ceiling of 3% of gross domestic product (GDP). It is significantly bigger than last year’s budget deficit of 1.65% of GDP.

“It will not be far (from 2.8%). Maximum is 2.8%, but the outcome may be 2.6% to 2.7%,” Chief Economic Minister Airlangga Hartarto told Reuters in an interview.

“It is because our spending has and will increase this year for programmes related to food and in the agriculture sector, including fertiliser subsidies,” the minister said, without providing details.

Indonesia’s original allocation for social assistance this year amounted to 496 trillion rupiah ($31.22 billion), up 4.2% compared to a year earlier, covering programmes such as rice and cash handouts to help the poor cope with higher food prices.

Food prices have risen as last year’s dry season lasted longer than usual due to the El Nino weather pattern.

The government has also increased by more than half the allocation of subsidies to cover 9.5 million metric tons of fertiliser, which would cost the government around 50 trillion rupiah. This measure was also intended to boost food production.

($1 = 15,888.0000 rupiah)

(Reporting by Stefanno Sulaiman, Gayatri Suroyo and Ananda Teresia; Editing by Kanupriya Kapoor)


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